Purchasing your dream home is a milestone—a dream many people in India aspire to achieve. For Indians, owning their own home is also an investment for the long term. But buying a home, particularly for first-home buyers, may look overwhelming. Fortunately, various incentives, schemes, and benefits are in place to make it easier to own your own home.
Shubham Housing Finance understand the issues of first-time buyers and strive to make home buying easier. In this blog, we shall discuss the top 7 advantages to first-time home buyers in India, assisting them in making the right choice and fulfilling their dream of owning a home.
Pradhan Mantri Awas Yojana (PMAY)
Pradhan Mantri Awas Yojana (PMAY) is a government initiative that provides housing within everyone’s reach. Under this scheme, eligible first-time home buyers are entitled to get interest rate subsidies on housing loans under the Credit Linked Subsidy Scheme (CLSS).
PMAY offers a maximum interest subsidy of ₹2.67 lakh on home loans, making the burden of buyers lower. It is offered for various income groups, such as Economically Weaker Sections (EWS), Low-Income Groups (LIG), and Middle-Income Groups (MIG). The scheme promotes urban and rural housing construction, so buyers have more choices. If you are eligible, PMAY can reduce your home loan repayment significantly, and your first home buying experience will be more affordable.
Lower Interest Rates on Home Loans
For first-time buyers, home loan interest rates play a crucial role in determining affordability. Banks and financial institutions offer special interest rates for first-time buyers, especially for women borrowers.
EMI (Equated Monthly Installment) helps in making repayment easier. It also raises affordability, and buyers can buy a better home. Women borrowers receive extra discounts on interest rates, usually in the range of 0.05% to 0.10% lower than normal rates. Choosing a lender with good rates and flexibility in repayment means a hassle-free loan experience for first-time homebuyers.
Tax Benefits on Home Loans
One of the most attractive financial advantages of buying a home in India is the tax benefits available on home loans.
- Under Section 80C, buyers can claim a deduction of up to ₹1.5 lakh on the principal repayment.
- Section 24(B) allows for a deduction of up to ₹2 lakh on interest paid for a self-occupied property.
- Additionally, under Section 80EEA, an extra benefit of up to ₹1.5 lakh is available for affordable housing, applicable to loans sanctioned before March 31, 2022.
By leveraging these tax benefits, first-time buyers can reduce their overall tax liability, making owning a home more financially rewarding.
Reduced Stamp Duty Charges
Stamp duty is a vital part of property buying expense, but various state governments reduce stamp duty levels for first-home buyers, and especially for women homebuyers.
A few states, such as Maharashtra, Delhi, Rajasthan, Uttar Pradesh, and Karnataka, have lower rates of stamp duty for women home buyers, i.e., about 1-2% lower than regular charges. They also have exemptions for first-time homebuyers under special affordable housing initiatives. By opting for lower rates of stamp duty charges, first-time homebuyers can actually lower their total property purchase price considerably.
Flexible Loan Tenures
Many financial institutions provide flexible loan tenure options, ensuring that first-time buyers can choose a repayment plan that meets their financial needs.
Increased loan tenure, often extending up to 30 years, helps in reducing the amount of EMI, making repayments easier on the pocket. Prepayment and foreclosure of loans are also available options without significant penalties. Some lenders offer step-up repayment plans, where EMI payments start lower and gradually increase as the borrower’s income grows. Certain lenders provide step-up repayment schedules, where initial EMI repayments are low and increase incrementally as the income of the borrower increases. Opting for a suitable tenure and repayment schedule secures long-term financial stability for first-time buyers.
Ability to Build Assets and Financial Securities
Buying a home is not just about securing a place to live; it is also a long-term investment that offers financial security.
Property prices in India generally appreciate over time, offering good returns on investment. Home ownership is secure and stable compared to rental properties and can be used as collateral for future financial requirements, like education loans, business growth, or medical treatment. For initial buyers, owning a home is a stepping stone towards financial prosperity and security.
Government Loan Schemes and Subsidies
Apart from PMAY, various state and central government schemes offer financial support, interest subsidies, and loan assistance to first-time home buyers.
Several states have their own affordable housing schemes, including Gujarat, Tamil Nadu, and West Bengal. Rural housing schemes provide financial support for individuals looking to buy homes in rural areas. The Housing for All Initiative promotes affordable housing projects across the country, ensuring that buyers from different income groups can benefit. These initiatives make owning a home easier for first-time buyers, especially those in the middle-income and economically weaker sections.
Conclusion
Purchasing a home for the first time is a major financial and emotional choice, but it has various benefits that make the process easier and cheaper. From government subsidies and tax relief to reduced interest rates and easy repayment terms, first-time home buyers in India have various chances to lighten their financial burden.
At Shubham Housing Finance, we want to assist you in making your home-buying experience a hassle-free one. With our personalized home loan facilities, best rates of interest, and professional expertise, we take care to ensure that your homeowner journey is enjoyable and trouble-free.
